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Notice of Filing of Amendment No. 2 and Order Approving on an Accelerated Basis a Proposed Rule Change, As Modified by Amendment No

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Notice of Filing of Amendment No. 2 and Order Approving on an Accelerated Basis a Proposed Rule Change, As Modified by Amendment No SECURITIES AND EXCHANGE COMMISSION (Release No. 34-82334; File No. SR-NYSEArca-2017-111) December 15, 2017 Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 2 and Order Approving on an Accelerated Basis a Proposed Rule Change, as Modified by Amendment No. 2, to List and Trade Shares of the GraniteShares Silver Trust under NYSE Arca Rule 8.201-E I. Introduction On September 12, 2017, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act” or “Act”)1 and Rule 19b-4 thereunder,2 a proposed rule change to list and trade shares of the GraniteShares Silver Trust under NYSE Arca Rule 8.201-E. The proposed rule change was published for comment in the Federal Register on September 29, 2017.3 On October 24, 2017, the Exchange filed Amendment No. 1 to the proposed rule change, which superseded the proposed rule change as originally filed. On November 16, 2017, the Exchange filed Amendment No. 2 to the proposed rule change, which superseded the proposed rule change as modified by Amendment No. 1.4 The Commission has 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 See Securities Exchange Act Release No. 81699 (Sept. 25, 2017), 82 FR 45634. 4 In Amendment No. 2, the Exchange: (1) clarified the permitted investments of the Trust (as defined herein); (2) supplemented its description of the duties of the Trust Custodian (as defined herein); (3) provided information about silver futures and spot trades; (4) supplemented its description of the process of Share (as defined herein) redemptions; (5) supplemented its description of how the Trust’s net asset value (“NAV”) will be calculated; (6) increased the minimum number of Shares that the Exchange will require to be outstanding at the commencement of trading; (7) expanded the circumstances in which the Exchange would or might halt trading in the Shares; (8) specified that the Shares would trade in all of the Exchange’s trading sessions; (9) represented that silver futures trade on significant exchanges, including COMEX, which is (a) operated by Commodities Exchange, Inc., a subsidiary of NYMEX (as defined herein) and (b) not received any comments on the proposed rule change. The Commission is publishing this notice to solicit comments on Amendment No. 2 from interested persons, and is approving the proposed rule change, as modified by Amendment No. 2, on an accelerated basis. II. Description of the Proposed Rule Change, as Modified by Amendment No. 2 In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to list and trade shares (“Shares”) of the GraniteShares Silver Trust (the “Trust”), under NYSE Arca Rule 8.201-E.5 Under NYSE Arca Rule 8.201-E, the regulated by the CFTC (as defined herein); (10) represented that NYMEX is a member of ISG (as defined herein); and (11) made certain technical corrections. Amendment No. 2 is available at: https://www.sec.gov/comments/sr-nysearca-2017-111/nysearca2017111- 2693352-161501.pdf. 5 On September 8, 2017, the Trust submitted to the Commission its draft registration statement on Form S-1 (the “Registration Statement”) under the Securities Act of 1933 (15 U.S.C. 77a) (“Securities Act”). The Jumpstart Our Business Startups Act, enacted on April 5, 2012, added Section 6(e) to the Securities Act. Section 6(e) of the Securities Act provides that an “emerging growth company” may confidentially submit to the Commission a draft registration statement for confidential, non-public review by the Commission staff prior to public filing, provided that the initial confidential submission and all amendments thereto shall be publicly filed not later than 21 days before the date on which the issuer conducts a road show, as such term is defined in Securities Act Rule 433(h)(4). An emerging growth company is defined in Section 2(a)(19) of the Securities Act as an issuer with less than $1,000,000,000 total annual gross revenues during its most recently completed fiscal year. The Trust meets the definition of an emerging growth company and consequently has submitted its Form S-1 Registration Statement on a confidential basis with the Commission. 2 Exchange may propose to list and/or trade pursuant to unlisted trading privileges (“UTP”) Commodity-Based Trust Shares.6 The Trust will not be registered as an investment company under the Investment Company Act of 1940, as amended,7 and is not required to register under such act. The Trust is not a commodity pool for purposes of the Commodity Exchange Act, as amended.8 The Sponsor of the Trust is GraniteShares LLC, a Delaware limited liability company. The Bank of New York Mellon is the trustee of the Trust (the “Trustee”)9 and ICBC Standard Bank PLC is the custodian of the Trust (the “Custodian”).10 The Commission has previously approved listing on the Exchange under NYSE Arca 6 Commodity-Based Trust Shares are securities issued by a trust that represents investors’ discrete identifiable and undivided beneficial ownership interest in the commodities deposited into the Trust. 7 15 U.S.C. 80a-1. 8 17 U.S.C. 1. 9 The Trustee is responsible for the day-to-day administration of the Trust. The responsibilities of the Trustee include (1) processing orders for the creation and redemption of Baskets; (2) coordinating with the Custodian the receipt and delivery of silver transferred to, or by, the Trust in connection with each issuance and redemption of Baskets; (3) calculating the net asset value of the Trust on each business day; and (4) selling the Trust’s silver as needed to cover the Trust’s expenses. The Trust does not have a Board of Directors or persons acting in a similar capacity. 10 The Custodian is responsible for safekeeping the silver owned by the Trust. The Custodian is appointed by the Trustee and is responsible to the Trustee under the Trust’s silver custody agreements. The Custodian will facilitate the transfer of silver in and out of the Trust through the unallocated silver accounts it may maintain for each Authorized Participant or unallocated silver accounts that may be maintained for an Authorized Participant by another silver-clearing bank approved by the London Bullion Market Association (“LBMA”), and through the loco London account maintained for the Trust by the Custodian on an unallocated basis pursuant to the Trust unallocated account agreement (the “Trust Unallocated Account”). The Custodian is responsible for allocating specific bars of silver to the loco London account maintained for the Trust by the Custodian on an allocated basis pursuant to the Trust agreement (the “Trust Allocated Account”). The Custodian will provide the Trustee with regular reports detailing the silver transfers in and out of the Trust Unallocated Account with the Custodian and identifying the silver bars held in the Trust Allocated Account. 3 Rule 8.201-E of other precious metals and silver-based commodity trusts, including the iShares Silver Trust,11 the ETFS Silver Trust,12 and the Sprott Physical Silver Trust.13 The Exchange represents that the Shares satisfy the requirements of NYSE Arca Rule 8.201-E and thereby qualify for listing on the Exchange.14 Operation of the Trust15 The investment objective of the Trust will be for the Shares to reflect the performance of the price of silver, less the expenses and liabilities of the Trust. The Trust will issue Shares which represent units of fractional undivided beneficial interest in and ownership of the Trust. The Trust will not hold or trade in any instrument or asset on any futures exchange or over the counter (“OTC”) other than physical silver bullion. The Trust will take delivery of physical silver bullion that complies with the silver delivery rules of the London Bullion Market Association (“LBMA”). The Shares are intended to constitute a simple and cost-effective means of making an investment similar to an investment in silver. Although the Shares are not the exact equivalent of an investment in silver, they provide investors with an alternative that allows a level of participation in the silver market through the securities market. 11 See Securities Exchange Act Release No. 58956 (November 14, 2008), 73 FR 71074 (November 24, 2008) (SR-NYSEArca-2008-124). 12 See Securities Exchange Act Release No. 59781 (April 17, 2009), 74 FR 18771 (April 24, 2009) (SR-NYSEArca-2009-28). 13 See Securities Exchange Act Release No. 63043 (October 5, 2010), 75 FR 62615 (October 12, 2010) (SR-NYSEArca-2010-84). 14 With respect to the application of Rule 10A-3 (17 CFR 240.10A-3) under the Act, the Trust relies on the exemption contained in Rule 10A-3(c)(7). 15 The description of the operation of the Trust, the Shares and the silver market contained herein are based, in part, on the Registration Statement. See note 5, supra. 4 Operation of the Silver Market The global trade in silver consists of OTC transactions in spot, forwards, and options and other derivatives, together with exchange traded futures and options.
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